1975 (6) TMI 52 - HC - Customs

Summary

Issues Involved:
1. Validity of the show-cause notice under Section 114(i) of the Customs Act, 1962.
2. Alleged contravention of Section 12(1) of the Foreign Exchange Regulation Act, 1947.
3. Interpretation of Sections 113 and 114 of the Customs Act, 1962.
4. Jurisdiction of Customs Authorities to impose penalties post-export.
5. Impact of clearance under Section 51 of the Customs Act, 1962 on subsequent penal actions.

Issue-wise Detailed Analysis:

1. Validity of the Show-Cause Notice under Section 114(i) of the Customs Act, 1962:
The petitioner, United India Minerals Ltd., challenged the show-cause notice dated March 8, 1967, issued by the Assistant Collector of Customs, Calcutta. The notice alleged that the company misdescribed and misdeclared the exported goods to circumvent the Trade Notice dated February 4, 1964, and violated Section 113(d) read with Section 114(i) of the Customs Act, 1962. The court held that the show-cause notice was valid and the appeal was allowed to this extent. The Rule issued by the trial judge regarding contravention of Section 113 read with Section 114(i) was discharged, and all interim orders in respect thereto were vacated.

2. Alleged Contravention of Section 12(1) of the Foreign Exchange Regulation Act, 1947:
The show-cause notice also alleged a violation of Section 12(1) of the Foreign Exchange Regulation Act, 1947. However, the trial judge, referencing the Supreme Court decision in Union of India v. Shreeram Durgaprasad, held that the notice was without jurisdiction. No arguments were advanced before the appellate court disputing this decision, and the focus remained on the Customs Act, 1962.

3. Interpretation of Sections 113 and 114 of the Customs Act, 1962:
The court examined the provisions of Sections 113 and 114 of the Customs Act, 1962, in comparison with the Sea Customs Act, 1878. Section 113(d) addresses goods attempted to be exported contrary to any prohibition, while Section 114 imposes penalties for attempts to export goods improperly. The court concluded that an attempt to export is punishable under Section 114, irrespective of whether the exportation has already taken place. The court emphasized that the offence under Section 113(d) is committed before the export, and subsequent exportation does not negate the offence or the personal liability of the exporter.

4. Jurisdiction of Customs Authorities to Impose Penalties Post-Export:
The court rejected the argument that Customs Authorities have no jurisdiction to impose personal penalties if the goods have already been exported. It held that the offence is committed before the export, and the actual export does not eliminate the offence. The court cited previous judgments supporting the view that Customs Authorities can proceed against the exporter for penalties even after the goods have been exported.

5. Impact of Clearance under Section 51 of the Customs Act, 1962 on Subsequent Penal Actions:
The respondent argued that once the proper officer permits clearance under Section 51, no further penal action can be taken. The court disagreed, stating that clearance under Section 51 does not prevent authorities from taking other steps under the statute. The court held that the offence was committed before the goods were exported, and the clearance did not exonerate the respondent from legal obligations. Additionally, the court noted that superior officers conducting adjudication proceedings are not bound by decisions of inferior officers who permitted clearance.

Conclusion:
The court upheld the validity of the show-cause notice under Section 114(i) of the Customs Act, 1962, and allowed the appeal to this extent. The Rule issued by the trial judge regarding contravention of Section 113 read with Section 114(i) was discharged, and all interim orders in respect thereto were vacated. The court emphasized that attempts to export prohibited goods are punishable under the Customs Act, 1962, regardless of whether the exportation has already occurred.